Reservoir No. 2, located in Pengilly, Minnesota, is a privately owned earth dam constructed in 1972 primarily for tailings storage purposes. This reservoir, standing at a height of 33 feet with a structural height of 40 feet, has a storage capacity of 7760 acre-feet and serves as a critical water resource along Welcome Creek. The dam spans 4450 feet in length and is regulated by the Minnesota Department of Natural Resources, ensuring its safe operation and maintenance.

With a significant hazard potential, Reservoir No. 2 underwent its last inspection in August 2013 and was deemed to be in satisfactory condition. The dam has a drainage area of 9 square miles and a maximum discharge rate of 310 cubic feet per second. Despite its age, the reservoir remains a vital component of the local water infrastructure, providing essential water storage and flood control benefits to the surrounding area. As climate change continues to impact water resources, the proper management and maintenance of Reservoir No. 2 will be crucial in ensuring the safety and sustainability of this vital water resource in Itasca County, Minnesota.